Deterrence

Deterrence is a central concept in the economic approach to crime pioneered by Gary Becker in 1968. Becker (whose paper was cited by the Royal Swedish Academy of Sciences when it awarded him the Nobel Prize in Economics in 1992) argued that all else being equal, a higher expected punishment (whether it be a fine, imprisonment, or other form of sanction) should reduce the incidence of crime.

The expected punishment is determined by an individual’s subjective probability assessment that he or she will be caught and punished, as well as the individual’s subjective assessment regarding the severity or disutility of the punishment. By itself, this deterrence hypothesis is a statement about the sign of the relevant response rather than its magnitude.